The Guardian has pulled out of its targeted advertising talks with Phorm, following a public outcry over plans for the UK's three largest ISPs to report the browsing habits of their customers in exchange for a cut of revenues.
The national newspaper had confirmed its involvement with Phorm in a story on 14 February.
The U-turn …

Values restored

All aboard the failtrain

Phorm share price is just below £20 again - but given that their sole product is falling apart and they have absolutely nothing else, that's £20 overvalued. I'm not an investment banker and not qualified to set target share prices, but even I can understand that no product = no profit = no business value beyond the value of their tangible assets, i.e. the PCs, swivel chairs and desks in their office (and as they rent a pretend office they probably don't even have those).

Phorm: time to buy a burger van, then at least you'll have a backup business line to fall back on, one which is actually quite profitable. And you'll be able to write 'First LSE-listed burger van' on your business cards. Everyone else: happy shorting.

Hopefully...

Great news.

This is great news and very welcome but lets not lose sight of the big picture. Yes its important that we stop Phorm here in the UK but unless we land a killer blow to their plans in the US then they will be back here further down the line with a new name and slightly altered system.

Kill them in the US, which is by far their biggest potential market, and we can hopefully drive them out of business. Get the word out. Email any american friends/colleagues you have. Warn them that Phorm are in negotiations with AT&T, Comcast & Verizon.

Translation...

"Guardian Newspapers has reiterated to us its goal of participating in the OIX. They have told us that, from an immediate resource perspective, and prior to the full deployment of the OIX, they are simply focused on more urgent projects."

Translation:

"Guardian Newspapers will do advertising. But they're not going to waste money on Phorm."

Why can't they just say that instead of Luvvy "marketing-speak". What does "immediate resource perspective" mean"? Surely spouting rubbish like this should be an "immediate loss of job situation" offence!

But what does OIX mean? Shorthand for OIKS I guess:

"If you refer to someone as an oik, you think that they behave in a rude or unacceptable way, especially in a way that you believe to be typical of a low social class. (BRIT) "

So is there a safe list of ISPs?

RE : Great news

"Kill them in the US,"

http://www.nytimes.com/2008/03/20/business/media/20adco.html

Some US legislators are already trying to make sure that services such as Phorm's require an explicit opt-in.

Explicit opt in kills their value proposition stone dead, since almost no one would bother, and for Phorm's network based spyware to generate profit for the ISPs they need a large chunk of the user base to be participating.

It won't stop it....

Phorm know that telco's/ISPs are suffering as much as anyone. The cables for sure have enormous debts, and so I think they can count on VM's support whatever happens.

Active use and configuration of AdBlock (FireFox Add-on) is the best defense. Apart from writing to the MD's of you ISP.

(Seriously, don't write to the call center or contact manager, your message WILL end up as the paper equivalent of Concord and hurtle straight toward De Din airport)..

I do hope Phorm a slow and painful death. There is too much of this profiling going on. Adam Curtis calls it the Big Lump Theory, were our habits are recorded and used to offer us stuff that is apparently relevant to us. The only end is profit for someone and less diversity in our own lives if we're daft enough to stop searching for our own truth and just accept that we must consume in predicatable patterns.

@Stephen Baines

You have to feel some sympathy, their ad team was probably bowled over by a glossy presentation and it takes a bit of a leap to arrive at how invasive such a system may or may not be. I spoke relatively early to a Guardian journalist who told me pretty much the same as the BBC, but much more politely and with a little more concern: that from the information released it seemed the system protected privacy, etc etc, but they were following the story with interest. They were as good as their word, and gave good coverage in print.

Compare this to the BBC, who pretty much told me that Register journalists weren't proper journalists and the BBC couldn't go publicising emotional crusades. They then pretty much printed a press release from Phorm. Shame I don't have a screen grab of the first copy to go up about Phorm on the BBC... But to the BBCs credit they too did follow up with the 80/20 report and Sir TBL.

So I say The Guardian deserve nothing but credit for spotting the potential ethical problems and getting out so soon, whilst the opposition is still relatively small.

'mercun view

As both a 'mercun and daily reader of El Reg (and the Guardian), I have been following this story with interest. It's been jolly good fun to see the firestorm raining down on Phorm and the subsequent tanking of their stock; let's hope the Guardian's decision to withdraw their support may be one of the final nails in Phorm's coffin.

I shall be contacting Verizon, my ISP, to let them know my feelings on this matter but knowing what clueless sheep the majority of my fellow 'mercuns are, 'twould be nice to see Phorm annihilated before it can spread it's infection across the pond.

Best News Yet!

Thank you to The Guardian! It is the best news yet in this outrageous plot. Now, let us hear the same kind of news from BT. It's about time BT caught itself on and did something for once that it's customers actually want - NO DEAL WITH PHORM. If BT go ahead with this deal, how can it be trusted to provide anything, including a phone service? This deal is simply a back door to nowhere good for the customers - I WILL NOT TOLERATE PHORM ON MY SYSTEM.

ISP List & Blockers

Ad blockers may prevent YOU from seeing ads, but it wont prevent Phorm from seeing YOUR data. As I understand it, Unless an ISP has stated that non participating customers will have their data routed through different equipment, the system trawls all of the click traffic from that ISP.

There is a list growing of "Phorm free" ISPs over at

http://www.badphorm.co.uk/e107_plugins/forum/forum_viewforum.php?11

I now await the arrival of the Phorm PR monkeys who seem to descend on any adverse comment posted anywhere, if this is so benign and experience enhancing, why are they going to such lengths to counter critisism?

Paris because she may well be able to do what Id like to tell Phorms management to do

One Down

I imagine a lot of other companies are now looking at distancing themselves from Phorm. Just a shame the ISP's haven't. I am still not clear what the plans of my ISP (VM) are. As things stand it will cost me a couple of months of VM subscription (not just BB) just to move ISP's so I'm holding off until they make a statement.

It's way past time that the ISP's realised that this has gone beyond "targeted advertising". It is a total breakdown of any trust people may have had in their supplier. The light has been switched on and they have been found with a hand in the cookie jar.

What Phorm and the ISP's promise means nothing. Had the light had not been switched on they were willing to quietly wire-tap their own customers and worse pass it off as "Webwise - your safer internet experience".

It cannot have escaped the entire industry that, if "Webwise" goes ahead unchallenged they are one step from the holy grail of IP to Postal address mapping. Do you now trust your ISP not to take that last step?

What needs to happen once Phorm have gone to the wall is an overhaul of

the law relating to this area. You can bet that Phorm will not be the last company to approach the ISP's with another quick money scheme. Next time it needs to be illegal full stop.

Adblock Plus Style banning of OXI participants

Why not create an adblock plus style boycott of all sites using Phorms OIX advertising, if word of this got out, it may help more companies to realise how much the public hate Phorm, and thus ditch their dirty advertising scheme, slamming yet another nail into the coffin.

Now would be a great time for Google to step up with incentives to advertise with them :D

We do also need a list of ISPs planning to use (or even talking to) Phorm, not just here in the UK, but as another poster said, in the US too. They can be boycotted too.

@AC re Focus On ISPs

I agree with you up to a point. Its pretty shameful that the ISPs seem quite content to sit back and let Phorm take the flak for them but I think its important we start to target both.

One of the reasons I havent been more vociferious in my denouncing Virgin Media (my ISP) is because so far they are sat on the fence. Time is running out though. If they dont wake up to common sense and kick Phorm into touch then my criticisms of them will mount.

Good news, but the day is young

It isn't only the potential for such systems to snoop your traffic when you are opted-out that folks should be worried about. ISPs, Phorm, and others endeavoring to establish this business model know they have to go slow. First, establish a beachhead, then slowly evolve the system and business model. Long range ambitions? Opt-in or pay more for your Internet access. Think an adblocker will be the solution? A system like this could easily block *all* HTTP access if you don't fetch the ads. Fight it now or you'll regret it.

More Progress

The wording of the statement is telling:

"It is true that we have had conversations with them [Phorm] regarding their services but we have concluded at this time that we do not want to be part of the network. Our decision was in no small part down to the conversations we had internally about how this product sits with the values of our company."

In other words he has realised that Phorm and everything it stands for is all about snooping and making profit from what should be and should stay private information. Phorm is intrusive, invasive and should have no place in a free society.

Stupid, or what?

Like "The Other Steve" I can't understand how the likes of BT have got themselves into this. Maybe I've just got 20/20 hindsight, but this was *always* going to result in a firestorm of bad publicity as soon as the details of what BT and VM are doing and, particularly *who* they are getting into bed with, got out.

Just another case of the 'shirts' thinking they know best? Surely *someone* in BT, at least, must have said "err, guys, you *do* know who this Ertugrul bloke is, don't you?"

What next? ISPs doing a deal with Alan Ralsky to supply 'targeted' UBEs to their subscribers? The Phorm deal is at about that level of nefariousness, IMHO

Zapped for not eyeballing the ads

AC: "A system like this could easily block *all* HTTP access if you don't fetch the ads. Fight it now or you'll regret it."

The free ad-subsidized version of Eudora was able to spot right away if the ad was covered by another window or shoved off the desktop.

And do you all realize that not reading ads makes the future provision of "free" software impossible? (can't see a tongue-in-cheek icon :-( ) And if everybody did it (TM) we'd be screwed?

Which calls for compulsory brailling or audifying of sponsored information content for the visually challenged, natch. And a compulsory throat-grabbing robot arm on our monitors for anyone even thinking about obstructing the "free" provision of socially constructive messages from our benefactors.

just the first skirmish

It's great news that the Guardian have seen sense at least for now but there is a more fundamental fight to win. We need legislation expressly proscribing intercept by the ISP or anyone else without opt-in. The fact that Phorm, BT, The Guardian etc. thinks that this could fly shows that the law is shaky.

How about El Reg starting a petition for web privacy a la the same privacy we expect from our mail and telephone services. This won't go away easily - too much cash to be had!!

Paris - because now she can stop boycotting her daily fix of The Guardian, the FT will have to wait!

The Global Village Bites Back

Now that the interwebtubenetthing has converted the earth's population (or a sizable fraction thereof) into a single e-connected village, one of a village's characteristics now has global scope: your reputation, which becomes common knowledge and can't be shaken off.

If the scum behind Phorm didn't have a demonstrable track record as spywaremeisters, there's a pretty good chance their system would have been quietly brought online with no flap a'tall. But Mrs. Jones told Mrs. Brown over the back fence, beware, he's a bad 'un, 'll stick spyware on your 'puter if you turn your back...and Mrs. Brown told Mr. Smith who told Miss Emily, and now the entire village knows.

It's like word-of-mouth advertising, immensely valuable, but cannot be bought at any price. (Except for attempts by sleazy marketing liars who attempt to salt social networking sites with fake praise for the junk they peddle.)

Paris because she's only sexually amoral afaict. And she seems to be honest.

Re: Plusnet is surprisingly Phorm free (ish)

Yes they protest that they will have nothing to do with it. I suspect that like that sailor come politician, a quick interview with the BT main board Chief could cause them to re-arrange their thinking instantly.

The problem with PlusNet is Ellacoya's "deep packet inspection technology". On the back of success with PlusNet, Ellacoya did a deal with BT Retail about 9 months ago.

Just over a year ago, Ellacoya published some "anonymised" data at:

http://www.isp-planet.com/research/2007/ellacoya_data.html

They probably did a bit better than AOL (customer search info) in anonymising what they published, but will they always be so careful. Will Plod have instant non-anonymous real time access in times to come? See point 5.

@tech idiot

We have some already, it's called the Regulation Of Investigatory Powers Act.

"The fact that Phorm, BT, The Guardian etc. thinks that this could fly shows that the law is shaky."

In fairness to potential OIX customers, I doubt they even considered the legislative aspects, nor should they really have had to, because it _should have been_ almost inconceivable that a company with the top three ISPs in the UK as partners would be selling anything even remotely dodgy. OIX will have been sold to their marketing people as an ad platform, and those people neither know nor care about the technical implementation of the platform.

As for BT, well, I'm sure they'll hide behind the Home Office note issued by Simon "mass data mining is OK by me" Watkin, and say that the HO said they could do it, and that would be all nice and legal because of his rather novel interpretation of RIPA, but the law isn't, in fact, all that shaky AFAICT, and as the incumbent telco BT should have been well aware of this. Certainly they ought not to have started intercepting packets in summer 2007, well before the 'it's OK with consent and opt in' advice was issued, since they had neither, and since before Mr Watkin chimed in to muddy the waters, it was plainly obvious to all that to do so for the purposes of targeted advertising would be illegal under _any_ circumstances. And not just "oh, theres another fine from ICO, pay up and be about your business" illegal, but "oh shit, we're going to prison" ilegal.

As someone already mentioned, the fact that BT (or any of the other ISPs involved) managed to get so far down the line without someone being in a position to say "Hold on a minute guys, this might not look so good to our customers", or "hang on a mo, there night be some issues with RIPA and the DPA here that I think we should discuss", or that people did but were ignored, is barely credible.

And yet that appears to be exactly what's happened. I'm still having difficulty believing that people running such large companies can truly be _that_ stupid, despite having plenty of first hand experience of corporate venality and stupidity, which makes me wonder if they've something up their sleeves yet.

VirginMedia...

are neither "sitting on the fence" or "silent" on the subject or Phorm...

http://www.virginmedia.com/customers/webwise.php

They talk of the Phorm partnership offering "new online protection and enhanced features", and "Phorm is the company providing this innovative solution, and it’s called Webwise. Webwise will help provide you with a safer and more relevant online experience by helping you avoid scam emails or websites, as well as making your online experience more relevant through advertising that matches your areas of interest."

Re: Re: Plusnet is surprisingly Phorm free (ish)

"See point 5."

Partial quote below :

"But ISPs will need to be on secure legal ground. If you collect this data, consult your lawyer, check that your AUP allows you to collect it, and make sure that local, national, and (if applicable) other nations' laws are not violated. "

Phorms Customers?

The Direct Marketing Association UK is Europe's largest trade association in the marketing and communications sector. The DMA was formed in 1992, following the merger of various like-minded trade bodies, forming a single voice to protect the direct marketing industry from legislative threats and promote its development.

Opt in - Opt out not the issue

This should be strictly illegal.

Unfortunately, I can believe that this is happening. All companies are trying to ring every cent out of every possible means. Legality has no bearing on whether a company will try or not. If it is proven illegal, the fines imposed for the offense will probably be of a lesser amount than the money brought in.

My hope is that a few small ISPs will start advertising that they are not part of this system and that they will see vastly increased subscription rates.

But there is then the problem of a small ISP using a larger ISPs circuits. What happens then?

Good Job

@ Captain kangaroo

Yes Virgin Media have that very phorm-friendly guff on their website but IIRC that has been on the website for quite some time. They have not made any statements to the wider Virgin Media community such as on the cableforum website.

Marketing madness

I can't help wondering whether this would have remained beneath the radar if Phorm's marketing department hadn't been asleep on the job. Calling their company "Phorm" was probably the most stupid action of the entire debacle.

Think about it. The name smacks of malware immediately. Any existing word beginning with "F" that is transposed to a "Ph" immediately gains negative connotations. Phishing, pharming, the list goes on.

I suppose we should be grateful that they were so stupid. Past tense, because it's obvious now that this will never fly. Will the next forced advertising privacy nightmare be as easy to spot is the question we should be asking ourselves. In fact, I'm worried that it was so blatant an error that it was deliberate. Decoy tactics, anyone?

@The Other Steve

I agree that the law seams pretty clear on the intercept/DP side but this was obviously not the case at BT! My suspicion is that they intend to play the long game and that's why we need an explicit law stating that there is no grounds for intercepting the data stream without express permission. If the law states this then they'll have to give in. I'm also suspect that the ISPs will introduce differential pricing to hardball customers into the program. Again, if the law was crystal clear then this won't fly.

re:Phorms unprecedented PR rearguard

No amount of PR can turn black paint to whitewash. Face it Phorm, you're as sneaky as your spyware and if you have any sense you should get out of the fire, drop your crazy schemes and leave us alone. But please don't go back to your route(kit)s.

webmasters do you know what you're signing up to?

Does anyone have any clue on why a webmaster would sign up to this service for his site, as if the visitor is interested in the sites content, then surely phorm will roll out a load of competitors ads, to distract the visitor. Maybe I'm just not fully tuned in with what is going on here.